Posted on 08/13/2007 7:37:57 AM PDT by John Galt 72
Hillary Clinton Corleone, Mortgage Lender
By Matt Carrothers
August 13, 2007
There is a key sequence of scenes in “The Godfather: Part II” in which a young Vito Corleone exerts his ascending power and influence over New York’s Little Italy neighborhood. A poor widow named Signora Colombo asks Corleone to intervene with her landlord, Roberto, who wants to evict her. Colombo cannot afford to move, and she has no where else to live.
Corleone seeks out the landlord Roberto and offers to pay six months of Signora Colombo’s rent in advance, at an increased rate. Roberto refuses, but soon finds out that Vito Corleone is not a man given to negotiation. A trembling Roberto then visits Corleone and says that Signora Colombo can not only stay in her home, but he will greatly reduce her monthly rent. Roberto leaves, and Corleone’s friend Genco declares, “God Bless America. We’re gonna make a big business.”
The Democratic presidential candidates see today’s Signora Colombos – families who defaulted on adjustable rate, sub-prime mortgages they could not afford – just as Corleone saw the poor widow – as helpless perdente, manipulated by others, who could not survive the mean streets without the helping hand of Don Vito Government.
On August 7, Sen. Hillary Clinton announced her detailed plan to “address mortgage lending abuses.” Clinton’s press statement, found on her web site, begins, “With foreclosure rates continuing to skyrocket across the country, Senator Hillary Clinton . . . laid out a plan to preserve the American dream of home ownership that would crack down on unscrupulous brokers, curb mortgage-lending abuses, assist families facing foreclosure and expand affordable housing options.”
The concept of borrower responsibility is obviously lost on Clinton. She then cites the plight of her own Signora Colombo, a woman named Kristi Schofield. Kristi and her husband can no longer afford to live in their home, because their adjustable-rate mortgage payments grew from $2,400 to $6,000 per month.
Signora Schofield said, “We tried to do the right thing and continued to make the payments as long as we could with our savings and what earnings we had from unemployment, temporary and part-time work.”
Schofield added, “Hillary Clinton is standing up today because she wants to help protect the American dream.”
In truth, Clinton’s plan would heap onerous and needless new regulations on the mortgage industry and establish a $1 billion housing trust fund to help “at-risk borrowers avoid foreclosure.” In other words, Clinton’s plan requires responsible taxpayers to subsidize the mortgage payments of deadbeats unable to comprehend the concept of adjustable mortgage rates.
Worse, if Clinton’s plan and similar plans touted by her Democratic opponents were to become law, the element of risk in borrowing and investing capital would disappear. If borrowers and investors incur no risk due to federally subsidized payments, nothing would stop lenders from inflating their home mortgage rates far beyond market-established values. Government subsidies have already distorted the free market and raised costs through agriculture, college tuition and health care programs.
An August 7 Wall Street Journal article that details the credit and mortgage situation quoted former Federal Reserve Chairman Alan Greenspan, who said, “These adverse periods are very painful, but they’re inevitable if we choose to maintain a system in which people are free to take risks, a necessary condition for maximum sustainable economic growth.”
Preach about it, Mr. Greenspan. The ability to risk money in the various investment markets, in startup businesses, in research and development of new products or in a family home fuels our nation’s turbocharged economic engine. These invested dollars, in turn, produce individual wealth for the risk takers, new consumer products and new jobs.
Contrary to Clinton’s pontifications, the American Dream is not to have the federal government make your house payment. The American Dream involves creating and acquiring enough wealth to make your own house payment, own your own retirement plan and have adequate remaining resources for both necessities and recreation.
Not surprisingly, the media and liberals have grossly overstated the so-called mortgage crisis.
Economist Jerry Bowyer, writing in National Review, found that just 0.6 percent, or 254,000, of the 44 million mortgages in the U.S. are currently in foreclosure. Additionally, the breathlessly reported sub-prime meltdown has caused an increase of only 35,000 mortgage foreclosures in the last quarter.
Thirty-five thousand homes in foreclosure is not a skyrocket. It’s a suburb.
A new study by the National Assessment of Educational Progress found that just 33 percent of high school seniors could explain the effect of an increase in interest rates on consumer borrowing. America’s Signora Schofields do not need a mortgage bailout. They need a lesson in finance.
Without a national crash course in economics, finance and personal responsibility, Ronald Reagan’s Shining City on The Hill could soon become Hillary Clinton’s Cosa Nostra.
Can’t pay your mortgage? Fugetaboutit.
© 2007 North Star Writers Group. May not be republished without permission.
Hillary to the people “What you have belong to me”. “I will take away from you for your own good and to help me”.
It’s too bad the libs believe they are exempt from her dictatorship. They guess they don’t realize that dictators are notorious for turning on their own. I really don’t believe all libs believe in the fairy tale “It Takes a Village”.
Anyone who wants a serious mortgage and actually responds to one of those ridiculous "Dancing Mortgage Ads" is a fool.
Hey, I want a $600,000 mortgage for only $1,100 per month!!!
My least favorite is the one with the surprised girl dancing. Then there is one with two idiotic girls, dancing and looking surprised too.
$2400/month gets you about a $400K mortgage.
$2400/month gets you about a $400K mortgage.
One useful number for quick mort calcs is the "cost per thousand per month" and if you borrow $100K for 30 years at 6%, the monthly payment is $599.55, call it $600. So the cost per thousand per month at 6% is $6. That's a good number to keep in mind. Obviously, that's a fixed loan.
Anyway, assuming she has the worst loan possible, she's probably paying maybe 8.5% on her new balance, which is likely 115% of her original loan. A $6K 8.5% pmt pays for a $780K loan. (= Trial & error at the calculator) $780K is 115% of about $678K. (And of course, nobody can know from the brief blurb whether texes and insurance are part of her payment, but I'll assume they are not) So these folks bot a $670-675K house for nothing or near-nothing down and are of course hosed.
Square footage? Bah! Those are details for the faint of heart. Who cares? RE always (and only) goes up!
Dumb bunnies who sign thos ARMs shoulda thought about that before hand....what if their company goes belly up, what if they get canned, get sick, their hubby croaks, they get the big D, there is a war, a tornado, they get demoted instead of promoted....the marketplace doesn’t owe them a raise in three yeears....they can’t predict the future....on the other hand we can hope for them that their rich uncle leaves them a million, that they win the lottery, that their ship comes in but no guarantees.
The biggest lie being told right now is by people who legally signed for and agreed to these mortgages, but then claim they "didn't know what they were signing."
Of course they did. They just claim stupidity now because they don't want to pay the bill.
In truth, Clinton’s plan would heap onerous and needless new regulations on the mortgage industry and establish a $1 billion housing trust fund to help “at-risk borrowers avoid foreclosure.” In other words, Clinton’s plan requires responsible taxpayers to subsidize the mortgage payments of deadbeats unable to comprehend the concept of adjustable mortgage rates.
For a 30-year mortgage: about $817,000 at 8% (an initial rate of 1.25% would have started the payments at $2800/month before going up after the fixed rate period). For a 20-year mortgage: borrow $595,000 at 1.25% initial, rising to 10.5% to bring it close to $6000/month - which is highly unlikely as a top rate. My guess is they borrowed a bleepload of money, far beyond their means, and now want to be bailed out by the taxpayer via Dona Hillary.
Liberal politicians whole reason for being is to have people (uninformed but willing voters) be dependent on them.
Conservatives say, what happened to you is unfortunate. Let’s see what needs to be done (if anything) to fix it, so you don’t need our help again.
The FDIC was the very instrumental is provoking the savings and loan crisis in the recent past. The savings and loan industry was enabled to gather large sums of “risk free” savings and then make risky loans without hurting their depositors. Meanwhile, the taxpayer was left holding the bag to cover the risky loans gone bad.
Those ads piss me off.
The loans they refer to are “Pay Option” loans. That payment they advertise is negatively-amortized. In other words, that payment doesn’t cover even all the interest and if that’s all you pay, the balance goes up. And - that small payment only lasts until the loan balance goes up to 110% of the original loan amount (sometimes up to 125% depending on program and original loan-to-value ratio) then they become a fully amortized payment of more like $4000 a month.
The loans aren’t the Devil, they serve a purpose, mainly for financially astute borrowers with wealth and the means to invest and grow their wealth in other venues. They’re not mean for Joe and Jane who can only afford that minimum payment, and only barely do so.
I’ve done a fair number of these loans, but they all must qualify at the FULL payment rate, not the “start payment” or anything like that, and only those with fairly high net worth who know how to use them.
Just like other types of loans that are causing trouble, these too were abused.
Well I wondered about that. In the old movies, banks always had armed guards, and then any would-be bank robbers had the townspeople - whose money was on deposit - to deal with.
Is it even legal to have an armed guard at a bank anymore? I have no idea.
Clinton’s plan requires responsible taxpayers to subsidize the mortgage payments of deadbeats unable to comprehend the concept of adjustable mortgage rates.
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Well, welcome to Hitlery Clinton, daughter of Marx, and master of the redistribution of wealth to BUY SOCIALIST POWER AND CONTROL. That should be the campaign slogan above the door of the DNC.....that “woman” is a Constitutional disaster and an American trainwreck waiting to happen.
I would think even the DNC would be smart enough to keep her away from the nomination on that basis alone....but POWER AND CONTROL are far more important than the future of America and the well-being of the American people and our economy....
The funny thing about all this to me is...Some lady somewhere is going to vote for Hillary! holding onto a final bit of hope that she will fix this mortgage ‘mess’ and their family will be able to keep their house...
Like that is going to happen...Like Hillary! really cares...
They purchased a huge house on less than a interest only mortgage.. Something really stinks with this set up. Maybe Holly Hillery did the financing.
If they were on unemployment when this deal went down the paperwork had to be a fraud situation.
The kilntoon have been living off the backs of tax pays all their adult lives, so she is blowing smoke up someones rear end.
They will do and say ANYTHING to get more power and screw the little people.
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